So far this year, the housing market has struggled to get itself off the ground, but housing is expected “to maintain its momentum in 2016 and be an economic engine of growth,” according to an updated forecast report from Freddie Mac.
"We've revised down our forecast for economic growth to reflect the recent data for the first quarter, but our outlook for the balance of the year remains modestly optimistic for the economy,” said Sean Becketti, chief economist for Freddie Mac.
“However, we maintain our positive view on housing," he continued. "In fact, the declines in long-term interest rates that accompanied much of the recent news should increase mortgage market activity, particularly refinance."
Looking at the last several reports on the subject from Freddie Mac, mortgage interest rates are at the lowest level in nearly three years, giving homeowners who have still not refinanced another shot to save money.
Here is a link to Freddie Mac’s five original housing predictions for 2016.
Freddie Mac’s updated 2016 outlook report noted that for the first quarter, the 30-year fixed rate mortgage averaged 3.7%. As a result, Freddie lowered its forecast for subsequent quarters by a tenth of a percent and now expects rates to average 4% in 2016.
In addition, Freddie Mac said house prices will rise by 4.8% and 3.5% in 2016 and 2017, respectively.
The report also revised first quarter 2016 real GDP growth down to 1.1% from 1.8% due to new data.